Ignition switch scandal: General Motors to pay up to $6.29 million for Arizona consumers

General Motors will pay $120 million to settle claims from dozens of states in its massive ignition switch defect scandal.
The settlement announced Thursday resolves one piece in the legal battles involving a case that left at least 124 people dead and 275 injured in small cars such as the Chevrolet Cobalt and Saturn Ion that were made by the old GM. The news release noted that "certain employees of GM and General Motors Corporation knew as early as 2004 that the ignition switch posed a safety defect because it could cause airbag non-deployment.
Brian McNamara, Detroit Free Press

This file photo shows a key in the ignition switch of a 2005 Chevrolet Cobalt in Alexandria, Va. General Motors has agreed to a settlement in the ignition switch scandal that will pay up to $6.29 million for Arizona consumers.(Photo: Molly Riley, Molly Riley, AP)

A settlement in one of General Motors' ignition-switch defect lawsuits will net consumers in Arizona up to almost $6.29 million.

Arizona took a different path than other states, including Michigan, in reaching a settlement that directs that payments will go to affected consumers, according to a news release Wednesday from the office of Arizona Attorney General Mark Brnovich.

As part of a $120 million settlement announced in October with 49 states and the District of Columbia, Michigan was to receive $4.3 million, with that money going to the state's general fund. If Arizona had taken part in that settlement, the state would have received about $2 million, the release said.

"Consumers should always come first in consumer fraud and class action lawsuits," Brnovich said in the release. "When I took office (in 2015), I couldn't believe consumer payments weren't the focus of the state's lawsuit against GM. I wasn't going to settle until Arizona consumers received compensation."

The release noted that Brnovich amended the state's 2014 lawsuit, which "alleged GM concealed defects, engaged in false advertising, and created a corporate culture that devalued vehicle safety," to include a claim for consumer payments.

"Under today’s proposed settlement, approximately 33,000 Arizona consumers who purchased certain GM vehicles between July 2009 and July 2014, and did not resell those cars before the recalls were announced, would be entitled to payments," according to the release. Payments will be at least $200, and consumers who participate will need to sign a release form sent by a claims administrator.

GM issued a statement after the settlement was announced:

"GM has reached a constructive settlement with the state of Arizona to finally resolve claims filed by the Attorney General regarding vehicles in that state that were subject to recalls in 2014, including the ignition switch recall. Since 2014, GM has taken important steps to help ensure the safety of its vehicles, including a new organizational structure dedicated to global vehicle safety and a robust Speak Up for Safety program."

The ignition switch defect, which could cause vehicles to stall, was a massive scandal for GM, leaving at least 124 people dead and 275 injured in small cars such as the Chevrolet Cobalt and Saturn Ion made by the old GM. The Detroit automaker recalled more than 2.7 million vehicles in 2014. Penalties and fines for the company topped $2.5 billion, and litigation involving hundreds of plaintiffs remains unresolved.